Production Operations Management and TQM 1

Product Design

Module 003 Product Design

At the end of this module, you are expected to:

1. Identify terms related to product development and design

2. Determine the types of consumer and industrial products
3. Analyze how to generate new product /new product development and
product development strategies
4. Examine issues of product designing and documents for production

Product

So as to understand things about product design, let’s start with the term, product. What is
product? According to Product Meaning in the Cambridge English Dictionary. (n.d.). Retrieved June
26, 2018, from https://dictionary.cambridge.org/dictionary/english/product , product is
something that is produced or made to be sold. It also refers to something that is being made and
with a purpose to be sold to consumers. Product can be in a form of product or the tangible type of
products and the service, which is an intangible one.

According to Consumer and Industrial Products | tutor2u Business. (n.d.). Retrieved June 27,
2018, from https://www.tutor2u.net/business/reference/consumer-and-industrial-products,
product may be classified into two – the consumer and industrial products. Consumer products are
goods and services intended for individual and household use while industrial products are for
other businesses' use. Moreover, consumer products are bought by final consumers for their
personal consumption while the industrial products are bought for use in conducting a business
or for further processing .

With regards to consumer products, according to 4 Types of Consumer Products and

Marketing Considerations. (2018, January 31). Retrieved June 27, 2018, from https://marketing-
insider.eu/4-types-of-consumer-products/ , the types of consumer products are the convenience
products, shopping products, specialty products and unsought products.

1. Convenience products
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 Figure 1 Convenience Products

Bharhati Stores(n.d.). Retrieved June 27, 2018, from

http://www.bharathistore.com/Bharathi/bharathi/view/pages/aboutus.html

Convenience products are bought most frequently by final consumers. Costumers

usually buy these products immediately, frequently and without comparing them with other
products or without buying effort. Examples are rice, sugar, coffee, magazines, laundry
detergents, bath soap and dishwashing soap.

2. Shopping products

Figure 2 Shopping Products

Shopping, sale, postcard, vector, products, business background, icons, abstraction. (2017, April 08).
Retrieved June 27, 2018, from https://www.shutterstock.com/image-vector/shopping-sale-postcard-vector-products-business-
617459669

The consumer products which costumers usually compare on the price, quality and
style in the process of their selection and purchase of goods and services. These are
usually less frequently bought and more carefully compared. More time and effort are
consumed by consumers to gather information and compare shopping goods available
in the market. Examples of these consumer products are bags, clothing accessories,
cosmetics, cellphones and etc.
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Product Design

3. Specialty products

Figure 3 Specialty Products

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 0 in Chapter 11
PowerPoint by Karen E. James Louisiana State. (n.d.). Retrieved June 27, 2018, from http://slideplayer.com/slide/10016424/

These are consumer products and services with brand identification and unique
characteristics for which certain consumers are willing to make a special effort in
purchasing. Examples are specific cars, appliances, designer clothes, high-prices
photographic equipment, etc.

4. Unsought products

Figure 4 Examples of Unsought Products

Aini - CIED 102 - Dr Aziah - Product Decision copy1. (n.d.). Retrieved June 27, 2018, from
https://www.emaze.com/@ALWILFL

These are consumers products which a consumer either doesn’t know about or know
already but does not have any consideration of buying them under normal conditions. Normally,
consumers do not think of buying them unless need arises. Examples are life insurances, pre-
panned funeral, and etc.

How about industrial products? According to Consumer and Industrial Products | tutor2u
Business. (n.d.). Retrieved June 27, 2018, from
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https://www.tutor2u.net/business/reference/consumer-and-industrial-products, industrial
products have three types and these are the materials & parts, capital items and supplies &
services.
1. Materials and parts

Figure 5 – Examples of Materials and Parts

PGSA2Z Electronics 55 Items Loose Parts Materials Science Project Kit: Amazon.in: Toys & Games. (n.d.). Retrieved June 27, 2018,
from https://www.amazon.in/PGSA2Z-Electronics-Materials-Science-Project/dp/B077CKSVRF

These are mostly sold to other industrial users which include raw materials,
components and etc.

2. Capital items

Figure 6 Example of Capital Item

Steel Building in Europe (n.d.) Retrieved June 27, 2018 from http://sections.arcelormittal.com/fileadmin/redaction/4-Library/4-
SBE/EN/MSB02_Concept_Design.pdf

These are industrial products used in operations and production. Examples are the
buildings infrastructure and IT systems.

3. Supplies & services

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Product Design

Figure 7 Examples of Supplies

Janitorial Services & Supplies LLC Servicing and Supplying to the Portland Area for Over 20 Years! (n.d.).
Retrieved June 27, 2018, from http://worldwide-janitorial.com/

Operating supplies like energy and business services such as security and
maintenance are examples of these industrial products.

Product Design
What do we mean by product design? According to M. (2017, March 28). What is Product
Design? Retrieved June 27, 2018, from https://www.strate.education/gallery/news/product-
design-definition, product design is a process of imagining and creating a thing or object which is
meant for mass production. It encompasses the physical aspects and the functionalities products
should have. New product designing relies on a problem-solving approach and goes through an
analytical process so as to improve the quality of life of the product user and his interaction with
the environment. It is about visualizing the user's needs, problem-solving and bringing a solution
for such problem. Designers of product actually work with other professionals such as marketers
and engineers. Product design has many fields of application: tableware, jewelry, medical devices,
sports, food preservation appliances, leisure, furniture, etc. Production cost, manufacturing
processes and regulations are considered in product designing.

Goods and Service Selection

Success of business usually lies in the goods and services they offer in the market.
Because of this, every business strives very hard to ensure that the products they offer in
the market are in good quality and satisfy the needs and wants of customers. To realize the
objective of providing quality products to customers to earn profit, the business firm always
looks for ways and means to improve existing products and design new products.

According to Effective Product and Market Strategy. (n.d.). Retrieved June 27, 2018,
from http://www.unco.ca/services/market-product-strategy/, effective product strategy is
an output of market research. To ensure that building and selling the right product to the
right person with the right message at the right price and through right channels is
materialized, research is conducted on market size, competitors, trends and customers. It
includes

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 • list of products features that should be prioritized and should be based on
discovered market requirements.
• Timeline of launching the product features
• Metrics on key product performance which will be monitored before and after
launch

Generating New Products

According to Employment, S. B. (2018, May 30). Generating and screening ideas for
new products. Retrieved June 29, 2018, from https://www.business.qld.gov.au/running-
business/growing-business/becoming-innovative/developing-products/new-
products/ideas , identifying good product ideas and using criteria to decide which ideas to
pursue is the beginning of successful new product development. From the same source, the
steps to follow in generating new products are the following:

1. Generating and screening ideas for new products

A. IDEA GENERATION
Listing of customer needs and the identification of existing weaknesses in
one's products, gaps in your product range and product areas. Needs of customers
should be listed based on the gathered information from the following sources:

a. Brainstorm on product issues

In brainstorming on product issues, one should work with the existing
team members they are the ones who usually talk to customers and they are
the ones who hear feedback about company's products and the needs of
customers. Capturing the feedback, product observations and ideas from the
team is a good idea.

b. Utilize research and development processes

Modifications that can be made to existing products should be
identified and what can be adapt for new products. The said modifications
should be consistent with the market and customers' feedback.

c. Review quality assurance processes

Issues on the product should be noted and potential ideas for
addressing gaps in quality should be identified.

d. Have a review of customer complaints records

Common weaknesses in your existing product range should identified.
Looking at the areas where improvement is needed. Managing customer
complaints should be learned by the business man.

e. Review the research

Customer research and market research should be reviewed and
further market and customer surveys should be planned if research gaps are
already identified. Reviewing what customers are looking for at the products
they usually buy and what are the things that make them frustrated or limited
about the products is a great idea.
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Product Design

f. Talk to suppliers and other business partners.

To capture manufacturers, retailers and sales representative's
knowledge about your products , talk to them. Likewise, by doing so, thoughts
can be learned on how to improve them.

g. Research and understand competition

Understanding one's competitor is a good idea. The competitor's
product range may be reviewed and considering how the market is
responding to them should be done.

h. Study catalogues and product information

Having a comprehensive understanding of existing products
available in the market should be ensured.

B. IDEA SCREENING

From the list of potential new product ideas, ideas to pursue and which to
be discarded should be decided. The business should consider competition,
company's existing products , needs of the market and their shortcomings.
From there, costumer needs that should be developed and the areas for
product improvement should be identified.
Set of criteria may be developed and the following may be included:
• Most brilliant identified needs of customers
• Most needed product improvement
• Benefits that can be gained by the target market
• The technical idea feasibility
• Scope and level of required research and development
• The idea profitability - the potential appeal to the market, the
price and what will cost the business in bringing the product to
the market.
• Particular place of products in the market
• The required development resources
• The marketing potential of the idea
• Business profile and objectives

a. SWOT analysis
Identify the strengths, weaknesses, opportunities and threats of
business ideas.

b. Innovation support
New product goals will be realized through innovative approach
and steps to foster innovation in a team.

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2. Business analysis of new products
A more sophisticated and detailed business analysis is required for a new
product idea to survive the new product development screening stage. The costs
involved in the proposed new product development will be determined through
business analysis, and the profits one may make form the product may be forecasted
in future financial years. Developing a product has a substantial cost. Inappropriate
ideas will be eliminated and unnecessary cost will be avoided through business
analysis. In assessing the viability of new product, the following steps may be
followed:
a. Estimate the price of the product.
Have your market and competitor research and feedback from customers
reviewed so as to determine the product selling price and the product to be
made.

b. Identify the market potential of the product.

Have market research and the sales performance of the existing

product in range be reviewed. To help the business identify the current
market level activity and interest in products in the same line as your new
product, use recent sales figures and industry sales figures.

c. Forecast sales volume.

Based on the research into customer needs, size of existing customer
base and market, estimate the product sale volume.

d. Identify the break-even point.

The break-even point or the amount of product one needs to sell to
cover the fixed costs such as rent, wages, and electricity should be determined
and the product's profitability should be estimated in this step.

e. Determine the minimum sale price.

Based on the product's anticipated price, project returns to identify
the lowest sales figure per item.

f. Consider the long term

Lifespan of the product in the market should be forecasted.
Determine how long will it be important to market's consumers and how
long will it take to realize a decent investment return and the market share
percentage to have the potential to realize.

g. Scope your marketing strategy

In this stage, the business and market research data to start shaping
the marketing strategy should be used. Marketing strategy may include the
relevant market identification and information about product as well as
approaches that will be significant in the product marketing.

3. New product prototypes and market testing

One of the most rewarding new product development phases is the prototype
testing. Prototype development of product allows one to bring the product to life for
the first time and test it in its market. Preparing the product for market entry will be
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Product Design

possible through investing in the market testing of the prototype. The following
should be considered in this stage:
a. Put someone in charge
Assign a team member who has strong skills in project management
to coordinate or manage the product's development and delivery process. To
maintain a practical, informative schedule and project plan that details, ask
the product development manager the stages involved in prototype
development and running market testing

b. Consult the experts

Consider commissioning consultants who have expertise in product
engineering and design because the said specialist can help businesses streamline
the process and avoid costly mistakes.

c. Protect intellectual property

Before taking the company’s product out for a test run, make sure the
patents are in place and the intellectual property is protected.

d. Commission a product prototype

Prototype building helps aids in establishing whether the idea or
invention will function. It also provides necessary information which can
build a new product or system and highlights any defects or flaws in the
design. The process of packaging, branding and marketing new product will
be determined tough product mock-up. It will also aid in testing the look and
feel of the product in sample segments of market. Technical expert may be
considered especially if one has no experience in product development.

e. Test the product in action

Test the product and consider identifying the characteristics of the said
product to customers. Then, testing those attributes repeatedly may be
considered.

f. Run focus groups

Enlist the assistance of a market researcher in facilitating the focus
group discussion with your sample target market. Conduct an interview with
the customers and take prototype to as many informed people as possible.

g. Make improvements
Use the feedback to improve the product. Make use of it to make
changes that will increase the chances of success of product. Retesting of
product may be done so as to evaluate some changes made.

h. Test it in the industry

Attending to industry events and trade or consumer expos may be
done so as to get feedback on the prototype. Opportunity to generate
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 market interest should be taken and details of interested customers who
want to hear about the product launch may happened in the said events. An
initial run at this stage may be considered to test customer acceptance more
broadly.

i. Develop a marketing strategy

Start developing marketing strategy by reviewing all the gathered
information and market analysis and market testing. The said marketing
strategy would help accurately segment and target the right market for the
product, set clear marketing objectives, and develop marketing strategies and
tactics for market segments.

j. Develop a marketing plan

The marketing plan will aid in organizing the implementing tactics for
the new product, planning sales and the product marketing activities, and
reaching the sales target.

4. Launching and commercializing new products

New product introduction is an important achievement for business. The final

and important step in the new product development process is the launching a new
product. When, how, and where to launch the product should be decided because these
will determine its early market impact. What will direct the business’ product launch will
be the business's marketing strategy and marketing plan.

According to the same source, the following approaches may be considered in

marketing new products:
a. Develop a direct marketing campaign.
Through direct mail, email, and social media, marketing campaigns should
be considered in getting straight to the customers.

b. Create your advertising plan

Planning and booking advertising is a must. Where the target customers
gained product information should be analyzed. One may choose to book
advertising through print and online media. Likewise, innovative publications
should be considered.

c. Create communications materials

Creating a product brochure and posters for point of sale so as to draw
attention to the new product is a very good idea for launching and
commercializing new products.

d. Develop public relations and news media strategy.

Mainstreaming media usually pick up stories about innovation. A print
and online new media campaign may be launched and interested industry
journalists may be targeted.

e. Develop a sales plan

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Product Design

Sales planning should be done to define appropriate strategies for type

of customers your business wants to have and sales targets that are realistic
and healthy should be set.

f. Develop a pricing strategy

Identifying the price for an entry-to market, a premium price and a
minimum sale price should be identified.

g. Contact your distributors

Forward notices of new product launch of a business frim should be
given to distributors. To calculate the numbers of products that need to be
met your anticipated sales volume, forecasts should be utilized.

h. Get professional advice

Professional advice should be taken into consideration by the business
firm. These can be gotten to public and private organizations that provide
support to businesses that invest in innovation, new product development
and commercialization.

Product Development Strategies

According to New Product Development Strategies - Obtain new Products. (n.d.).

Retrieved June 29, 2018, from https://marketing-insider.eu/marketing-explained/part-iii-
designing-a-customer-driven-marketing-strategy-and-mix/new-product-development-
strategies/, the new product development strategies are
1. Acquisition – It refers to purchasing the whole company, a patent or a
license to produce another product.

2. New product development efforts – refers to company’s own new product

development efforts and it can be in the form of

• Original products
• Product improvements
• Product modifications
• New brands

TYPES OF NEW PRODUCTS

1. New-to-the-world products - these refer to inventions such as the
first automobile or laptop. Most of them are simply improvements
on existing products and are very rare.

2. New category entries – products which are introduced by the

business firms into a product category where the business had not
been doing business up to this time.
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 3. Additions to product lines – refer to line extensions in the
company's current markets such as a new cellphone or tablet
computer introduced by Apple.

4. Product improvements - refer to current products that are made

better in some way. In fact, most new products are product
improvements. Likewise, these refer to taking the current or
present product and attempting to find a new use for it. Ex. A
certain brand of baking soda which was repositioned to be a carpet
cleaner and deodorant for a refrigerator.

Issues for Product Design

According to Operations Management (n.d) Retrieved June 29, 2018 from

https://www.utdallas.edu/~metin/Ba3352/Slides/productdesign.ppt, the main objective
of any business firm in designing its product and service is to deliver satisfaction to
customers. Other objectives are to be able for the product and service to function well,
meaning with high quality and with a lower lost and will give a good profit to the company.
In doing so, the business organization's capabilities in designing the goods and services are
taken into account.

In the same source, major factors to consider in product and service designing were
given and these are the cost, quality, customer satisfaction, time-to-market and its
competitive advantage. There are steps to follow in the product and service designing and
these are the following:
1. Translate needs and wants of customers into product and service requirements.
2. Refine existing products and services.
3. Develop new products – products and services
4. Formulate objectives with regards to quality
5. Formulate targets with regards to costs
6. Develop a new product and service and test prototypes
7. Document specifications of products.

According to the same source, designing product and service has legal, ethical and
environmental issues. The said issues become important when there is a potential harm to
the environment. Government agencies which regulate and among the familiar agencies are
the Bureau of Food and Drug, the Occupational Health and Safety Administrations, DENR,
NGOs and local agencies. An example of ethical issues is the release of products with
defects. In this case, the business firm should see to it that there are people who will oversee
the products' quality control area to be released in the market. Regulations and legal
considerations are:
1. Product liability refers to a manufacturer or producer's liability for any damages
or injuries caused by a defective product.

2. Uniform commercial code – it refers to product’s merchantability and fitness

implication.

To avoid problems related to product and service designing, designer should commit
to
 Production Operations Management and TQM 13
Product Design

• Producing designs that are consistent with the company's goals.

• Providing customers the value they expect
• Making health and safety a primary concern
• Considering potential harm to the environment
• Implementing Uniform Commercial Code – products merchantability and
fitness.

There are other issues on product and service designing and these are the following:
1. Product/service life cycles

According to Product Life Cycle Stages - Managing the Product Life

Cycle. (2015, July 13). Retrieved June 29, 2018, from https://marketing-
insider.eu/product-life-cycle-stages/ , the product life cycles are
a. Product development – It starts when the business firm finds and
develops a new product idea. During this stage, sales are zero and
the company costs for investment increase.

b. Introduction - In this stage, sales grow slowly as the product is

introduced in the market. Profits are not yet materialized because
of heavy expenses of introducing the product overweigh sales.

c. Growth – It this stage, there is a rapid market acceptance and

increasing profits.

d. Maturity – In this stage, sales growth slows down due to the fact
that the product has achieved acceptance by most potential
buyers. There is a level off or a decline of profit because marketing
outlays need to be increased to defend the product against
competition.

e. Decline – Sales fall of and profits drop.

Are all products follow all five stages of product life cycle? The answer
is no because some products and services are introduced and die quickly and
some stay in the mature stage for a long time. Some are cycled back into the
growth stage after reaching the decline stage through repositioning and
strong promotion. What is the issue that should be addressed here? It is how
the business firm will design their products and services so as not to
experience all the stages of the product life cycle and, at the same time,
continuously give satisfaction to customers.

2. Standardization - According to Operations Management (n.d) Retrieved June

29, 2018 from
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 https://www.utdallas.edu/~metin/Ba3352/Slides/productdesign.ppt , it
refers to the extent on which there is no variety in product, service, or process.
Standardized products are immediately available to customers. There are
advantages and disadvantages of standardizing the product. To address the its
advantages, mass customization may be considered . What is mass
customization? It refers to a strategy of producing or manufacturing
standardized goods and services but incorporating some degree of
customization in the said products and services. It can be done through
delayed differentiation and modular design.
• Delayed differentiation – a tactic of postponing of product
completion. It refers to producing but not completing a product
or service until customers' preferences and specifications are
known.

• Modular design - a form of standardization wherein parts are

subdivided into modules that are easily replaced or
interchanged. It allows easier diagnosis and giving of remedy to
failures; easier repair and replacement and manufacturing and
assembly are simplified.

3. Product/service reliability – it refers to the ability of part, product or system

to perform its intended function under a prescribed set of conditions. There
are ways to improve product/service reliability, and these are

• Improve component design

• Improve production/assembly techniques
• Conduct testing of products
• Avoid redundancy and to provide backup
• Follow and implement preventive maintenance procedures
• Conduct user education
• Improve system design

4. Range of operating conditions – it refers to the set of conditions under which

a product’s reliability is specified.

Documents for Production

Let us start with the meaning of the term, Documentation. According to ISO as cited
in Nambiar, S. (2015, February 25). Manufacturing documents-GMP. Retrieved June 29,
2018, from https://www.slideshare.net/swathi92/manufacturing-documentsgmp ,
documentation refers to information created, received and maintained as information and
evidence by a business organization in pursuance of the transaction of business or legal
obligation. The following may be considered as manufacturing documents:

1. Specification and standards

2. Raw material records
3. Labels and printed packaging material records
4. Master formula records
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Product Design

5. Batch production records

6. Quality control records
7. Calibration and validation records
8. Distribution records
9. Batch packaging records

Through the said documents, the following are enjoyed by the business firm:
• Reduce costs
• Reduce cycle time
• Increase service levels
• Compliance regulatory, corporate policies and certification assistance
• Maintenance management
• Information about equipment
• Gives information about the product, premises and personnel.

References and Supplementary Materials

Books and Journals

1. Product Meaning in the Cambridge English Dictionary. (n.d.). Retrieved June 26,
2018, from https://dictionary.cambridge.org/dictionary/english/product
2. Consumer and Industrial Products | tutor2u Business. (n.d.). Retrieved June 27,
2018, from https://www.tutor2u.net/business/reference/consumer-and-
industrial-products
3. 4 Types of Consumer Products and Marketing Considerations. (2018, January 31).
Retrieved June 27, 2018, from https://marketing-insider.eu/4-types-of-consumer-
products/
4. Shopping, sale, postcard, vector, products, business background, icons,
abstraction. (2017, April 08). Retrieved June 27, 2018, from
https://www.shutterstock.com/image-vector/shopping-sale-postcard-vector-
products-business-617459669
5. M. (2017, March 28). What is Product Design? Retrieved June 27, 2018, from
https://www.strate.education/gallery/news/product-design-definition

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 6. Caballero, H. (n.d.). Product design and process selection. Retrieved June 27, 2018,
from
http://www.academia.edu/10382127/Product_design_and_process_selection
7. Employment, S. B. (2018, May 30). Generating and screening ideas for new
products. Retrieved June 29, 2018, from
https://www.business.qld.gov.au/running-business/growing-
business/becoming-innovative/developing-products/new-products/ideas
8. New Product Development Strategies - Obtain new Products. (n.d.). Retrieved June
29, 2018, from https://marketing-insider.eu/marketing-explained/part-iii-
designing-a-customer-driven-marketing-strategy-and-mix/new-product-
development-strategies/
9. Operations Management (n.d) Retrieved June 29, 2018 from
https://www.utdallas.edu/~metin/Ba3352/Slides/productdesign.ppt
10. Product Life Cycle Stages - Managing the Product Life Cycle. (2015, July 13).
Retrieved June 29, 2018, from https://marketing-insider.eu/product-life-cycle-
stages/
11. Product development. (n.d.). Retrieved June 7, 2018, from
https://www.marketingdonut.co.uk/marketing-strategy/product-development
12. Nambiar, S. (2015, February 25). Manufacturing documents-GMP. Retrieved June 29,
2018, from https://www.slideshare.net/swathi92/manufacturing-documentsgmp

Online Supplementary Reading Materials

1. Incorporating Environment Issues in Product Design and Realization (n.d.)
Retrieved June 7, 2018 from
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.561.8386&rep=re
p1&type=pdf

Online Instructional Videos

1. 4.1 New Product Development Process: Stage-Gate - MODULE 4: Estimating the
Size of the Market. (n.d.). Retrieved June 29, 2018, from
https://www.coursera.org/lecture/quantitative-customer-insights/4-1-new-
product-development-process-stage-gate-WK3Li
2. N. (2016, September 06). New Product Development. Retrieved June 29, 2018 from
https://www.youtube.com/watch?v=6TqMj0Dne2A
3. G. (2017, December 13). New Product Development Process. Retrieved June 29,
2018, from https://www.youtube.com/watch?v=RhYlKckoHwA